As the Q2 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the specialized consumer services industry, including LKQ (NASDAQ:LKQ) and its peers.
Some consumer discretionary companies don’t fall neatly into a category because their products or services are unique. Although their offerings may be niche, these companies have often found more efficient or technology-enabled ways of doing or selling something that has existed for a while. Technology can be a double-edged sword, though, as it may lower the barriers to entry for new competitors and allow them to do serve customers better.
The 9 specialized consumer services stocks we track reported a weaker Q2; on average, revenues missed analyst consensus estimates by 0.8%. while next quarter's revenue guidance was in line with consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the specialized consumer services stocks have fared somewhat better than others, they collectively declined, with share prices falling 4.1% on average since the previous earnings results.
LKQ (NASDAQ:LKQ)
A global distributor of vehicle parts and accessories, LKQ (NASDAQ:LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.
LKQ reported revenues of $3.71 billion, up 7.6% year on year, falling short of analysts' expectations by 4%. Overall, it was a weak quarter for the company with a miss of analysts' organic revenue estimates and underwhelming earnings guidance for the full year.
“Based on a projected continuation of the revenue headwinds we experienced in the first half of 2024, we are lowering our full year guidance. While we have taken actions to reduce costs and protect our margins and cash flows, the benefits are not expected to offset the full impact of the lower revenue expectation,” stated Rick Galloway, Senior Vice President and Chief Financial Officer.
The stock is down 12% since reporting and currently trades at $39.15.
Read our full report on LKQ here, it's free.
Best Q2: Carriage Services (NYSE:CSV)
Established in 1991, Carriage Services (NYSE:CSV) is a provider of funeral and cemetery services in the United States.
Carriage Services reported revenues of $102.3 million, up 4.8% year on year, outperforming analysts' expectations by 7.7%. It was a strong quarter for the company with full-year revenue guidance exceeding analysts' expectations.
Carriage Services pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 6.6% since reporting. It currently trades at $30.01.
Is now the time to buy Carriage Services? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Matthews (NASDAQ:MATW)
Originally a death care company, Matthews International (NASDAQ:MATW) is a diversified company offering ceremonial services, brand solutions and industrial technologies.
Matthews reported revenues of $427.8 million, down 10.9% year on year, falling short of analysts' expectations by 10%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Matthews had the weakest performance against analyst estimates in the group. As expected, the stock is down 5.9% since the results and currently trades at $26.40.
Read our full analysis of Matthews's results here.
Frontdoor (NASDAQ:FTDR)
Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ:FTDR) is a provider of home warranty and service plans.
Frontdoor reported revenues of $542 million, up 3.6% year on year, in line with analysts' expectations. Revenue aside, it was an ok quarter for the company with a solid beat of analysts' earnings estimates but a miss of analysts' home service plans estimates.
The stock is up 13.5% since reporting and currently trades at $44.83.
Read our full, actionable report on Frontdoor here, it's free.
ADT (NYSE:ADT)
Founded in 1874 and headquartered in Boca Raton, Florida, ADT (NYSE:ADT) is a provider of security, automation, and smart home solutions, offering comprehensive services for home and business protection.
ADT reported revenues of $1.20 billion, up 3.1% year on year, in line with analysts' expectations. Taking a step back, it was a solid quarter for the company with an impressive beat of analysts' earnings estimates and in-line earnings guidance for the full year.
The stock is down 7.3% since reporting and currently trades at $7.21.
Read our full, actionable report on ADT here, it's free.
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